Trend Levels

Market Structure

Any Market has three trends:Primary Trend, Secondary Trend and Minor Trend.

When you are gonna buy/short some stocks. the first thing you should figure out is which level the trend is in. The smartest guy in the market would only trade the direction of the Primary trends, pay attentions to Secondary Trends and forget about the noise from the Minor trends.  

1.So what is the Primary Trend?

Simply put,  A Primary Trend is a broad movement neither goes up or goes down, both of which might last from a year to couple of years (average periods is 1 to 3 years, according to history records). The people who lost most of their accounts more often than not is because they went against the primary trend. The Primary Trend is very powerful and no one can beat it, the only thing you should is just follow it, be friends with it, then you will feel very comfortable.  

2.Why Pay attention to Secondary Trend?

This is an important decline in a primary bull market or a rally in a primary bear market, usually lasting from three weeks to three months. Why should we pay more attention to it is because they are very misunderstood. They looked very like a change of previous primary trend, which might have proved to have been merely a correction. A better way to play secondary trend is just stay out, do nothing. The market will finally tell you the truth of direction, do not anticipate, just follow.

3.Forget about the noise from the daily Minor Trend  

Minor trends can easily be manipulated by big players, they could make you very emotional, which is the most dangerous way to trade a stock. In case of been played by others, you choose not to play with them. This is the right way to participate the market.